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Level 1

Accurately account for SAMPLES received as COGS

We purchase samples in order to test and determine if the product is an item we want to sell. Currently the samples go into a COGS account called Samples. Because these are samples and not actual product for sale they do not show up in COGS when I create a P&L. How do I accurately account for the COGS of these sample items?
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Best answer December 10, 2018

Best Answers
Level 1

Accurately account for SAMPLES received as COGS

To put samples in COST OF GOODS SOLD is confusing and not the right place.  I would suggest it belongs into EXPENSE:  PRODUCE SAMPLES  as these are not compiled into any cost of goods yet, and are an ongoing expense to running your business by testing and trying out samples.

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4 Comments
Level 1

Accurately account for SAMPLES received as COGS

To put samples in COST OF GOODS SOLD is confusing and not the right place.  I would suggest it belongs into EXPENSE:  PRODUCE SAMPLES  as these are not compiled into any cost of goods yet, and are an ongoing expense to running your business by testing and trying out samples.

View solution in original post

Level 1

Accurately account for SAMPLES received as COGS

Would you put the tax line mapping to Other Deductions: Office Expense

Level 2

Accurately account for SAMPLES received as COGS

Hi,

I have a question,  we sent samples to our sales rep we have been invoicing the units, but recently found out that throws out our cost of goods sold margin.  What would be the best way to keep track of our samples sent to our sales rep and the giveaway.

 

Thanks so much.

Level 2

Accurately account for SAMPLES received as COGS

Hi,

We are an apparel business, on every season we purchase samples for our trade show display and for our sales rep.  when we receive samples we enter as part of our inventory,  but in our accounting software, is recorded as an expense.  Is this correct?

Can someone help me in what is the best way to record sample productions?

 

Thank you

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